Starbucks Delivering Service Essay

1766 words - 8 pages

Starbucks: Delivering Customer Service

In late 2002, Christine Day, Starbucks’ senior vice president of administration in North America, discovered that the company was not meeting customer expectations and that there was a decline in customer satisfaction. Day attributed the decline in customer satisfaction to a service gap, particularly service speed. Day must decide whether she will proceed with her plan to invest an annual $40 million across its 4,500 company stores. The investment would allow each store an additional 20 hours of labor per week. The objective is to improve service speeds and in turn increase customer satisfaction.

In addition to training new employees on “hard skills,” it trained each on “soft skills.” This training focused on enthusiastically greeting each customer making them feel welcome. They encouraged baristas to engage with customers on a personal level and eventually remember their names and orders if they were regular customers. Starbucks also had a “Just Say Yes” policy that encouraged partners to go beyond company procedure to ensure customer satisfaction. Howard Schultz was confident that satisfied partners translated to satisfied customers. For this reason, Starbucks partners were well-paid hourly workers with benefits and stock options. As a result, Starbucks had one of the lowest employee turnover rates in the industry, only 70% compared to other fast-food retailers at 300%. Low turnover and the company’s practice to promote from within allowed partners to stay in the organization longer allowing them become more experienced in treating customers while providing faster service.

The final component of the value proposition was atmosphere. This was a result of Shultz’s objective to make Starbucks America’s “third place.” His goal was to create a place where people could go for the coffee and stay for the ambiance. He wanted to recreate the Italian coffee culture, which embraced the experience of enjoying coffee. The idea to attract customers to stay and enjoy a sense of community also helped to lead to secondary sales.

The Starbucks Customer and Brand

When Starbucks went public in 1992, it had only 140 stores in the Northwest and Chicago. Ten years later, Starbucks had exponentially grown to over 4,500 stores in North America. Its expansion strategy focused on selecting locations based on the profile of the typical Starbucks drinker, coffee consumption levels, and the intensity of competition. With this growth, came changes to the customer base and an evolving customer profile.

In 1992, the customer base consisted of affluent, mid-to-upper class professionals who were well-educated, skewed female, and were between the ages of 25 and 44. Customers in the early 1990’s went to Starbucks to enjoy their coffee and its culture. They identified Starbucks as being a trendy place where they could get high-quality coffee and partake in the coffee drinking experience that Schultz had visualized. The customer base in 2002 had changed to a younger, less well-educated customer in a lower income bracket. By 2002, the retail expansion had changed the norm from ‘customers going to Starbucks’ to ‘Starbucks going to the customers.’ This customer base liked the convenience of having a Starbucks on the way to work or their next meeting place. This group wanted to get-in-and-get-out.

Another consequence of their rapid growth strategy is how it affected their public image. A market research team discovered that the number of respondents who strongly agreed with the statement “Starbucks cares primarily about making money” went up from 53% in 2000...

Other Papers Like Starbucks Delivering Service

905 words - 4 pages
Organizational Behavior and Communication
Laura Strickland
ACC/530
October 24, 2014
Bryon K. Johnson
Organizational Behavior and Communication
Starbucks, a place to receive the best coffee at a convenient location, while experiencing a unique interaction with individuals trained to provide the best customer service possible. This was the desire of three friends when Starbucks was established 43 years ago. The research in this paper will

1840 words - 8 pages
platform from which to compete as it already has so many stores in prominent locations with drive-thru windows.” Additionally, “Panera uses its high-quality and reasonably healthy full menu to capture the breakfast and lunch crowd. Starbucks is currently weak in its food service, so many customers who find Panera's coffee choices comparable are lost over the lunch hour.” Caribou Coffee has a home delivery service. Delivering a coffee club that

792 words - 4 pages
offer power supply for laptops use, which is considerate for diverse customers’ experiences. Furthermore, the products in Starbucks including coffee machine, water faucet, ice container, mug, stirring rod and adhesive tape etc. are elaborately designed for higher equality and faster delivering.
Last but not least, standard beverages made by baristas are the service that Starbucks successfully extend its brand all over the world. Today, Starbucks

4616 words - 19 pages
M512 MARKETING STRATEGY
Starbucks: Delivering
Customer Service
R.A
I have neither given nor received unauthorized aid on this assignment
1. What factors accounted for the success of Starbucks in the early 1990’s? What was so
compelling about the Starbucks value proposition?
The success of Starbucks in the early 1990’s can be attributed to Howard Schultz’s vision of
the Starbucks brand. Schultz inspired of a company which would make the customer

4072 words - 17 pages
competitors for the new product line are Orange Julius, Jamba Juice, fast food chains such as McDonald’s and Burger King, and other small coffee alternative providers. Complementors Starbucks recently teamed up with Bank One to offer the Starbucks Card Duetto Visa.7 This is a stored-value card and traditional credit card. Starbucks has also introduced a T-Mobile Hotspot service which allows the Starbucks customer to have access to wireless internet for a

1961 words - 8 pages
surprise that the new technological addition, the Starbucks Card, boosted sales and helped growth during a time when the economy was struggling. “Starbucks went back to basics, and they‟ve approached the basics with a science and intensity that no one has ever done before.”8]]] [Reword]
References
Starbucks website, Available at :
Starbucks: Delivering Customer Service, by Youngme Moon, John Quelch from Harvard Business School, 9-504-016, REV. JULY 2006
Available at: [Accessed on July 2012]

2326 words - 10 pages
differentiation between starbucks and the smaller coffee chains. The image people had was that the company was only interested in achieving profits and expanding and not so much delivering good coffee quality and friendly service – always feel welcome had only 39% of agreement on the 2002 survey. No clear communication of value and values to customers. There is also the shift in customers from well educated to less educated and with lower income, who had a

2264 words - 10 pages
diversifying their menu would provide fresh healthy coffee substitutes, thus potentially attracting new customers as well as increasing the frequency of visits from current customers who may not need caffeine during that particular time in the day.
Catering
Starbucks can expand their service to office or home delivery when the purchase size reaches a reasonable minimum. Because the drive-thru retail store is increasingly being marketed towards

769 words - 4 pages
their excellent customer service. The organizational culture at Starbucks values the needs of their customers which require their employees to always display just that. All of the employees wear green Starbucks aprons and displayed energetic and friendly attitudes. Every employee is enthusiastic to serve customers and focused on the needs of the customer. It is obvious that management requires employees to be well trained and knowledgeable their

1516 words - 7 pages
competency that a successful manager at Starbucks the human skill in which he or she is likely to have is the ability to interact with other people and work effectively in a group.
This type of skill is important when working in a guest service setting. Employees working for Starbucks have been trained to ensure that the customer gets what they want in their order, while delivering fast, efficient, and effective customer service.
Starbucks

3129 words - 13 pages
methodology for applying Starbucks delivery service concept to customers will be through in-store coupons, email advertising, on-line apps for smart phone users, television commercials, newspaper ads as well as through Starbucks website and Facebook social media network. Customers will be able to register their on-line profiles of work and home addresses to locate the delivering Starbucks stores near them. Customers would select from a menu of beverages

2438 words - 10 pages
Analysis of Starbucks Delivering Customer Service
Problem statement:
• In 2002, market research has shown that Starbucks has a gap in meeting its customer’s expectations in terms of customer satisfaction.
• On interpretation the marketing research data, Christine Day, Senior Vice President concluded that the speed of service was the main reason for this decline in customer satisfaction. So she proposed to improve the service time such that

3563 words - 15 pages
fast and generating profits and cash.The Four P's of MarketingProductThe brand components at Starbucks are products, service, and atmosphere. The tangible products are coffee beverages, food items, whole beans, and equipment/accessories. Other products such as service and atmosphere are intangible. Service is geared toward customer satisfaction, giving the customer what he/she wants, including customized beverages. This process can take a little

687 words - 3 pages
Starbucks – Delivering Customer Service
1. What factors accounted for the extraordinary success of Starbucks in the early 1990s? What was so compelling about the Starbucks value proposition? What brand image did Starbucks develop during this period?
2. Why have Starbucks’ customer satisfaction scores declined? Has the company’s service declined, or is it simply measuring satisfaction the wrong way?
3. How does the Starbucks of 2002 differ